Elevating theoretical insight and predictive accuracy in business research: Combining PLS-SEM and selected machine learning algorithms

We propose a routine for combining partial least squares-structural equation modeling (PLS-SEM) with selected machine learning (ML) algorithms to exploit the two method’s causal-predictive and causal-exploratory capabilities. Triangulating these two methods can improve the predictive accuracy of res...

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Published in:Journal of business research Vol. 173; p. 114453
Main Authors: Richter, Nicole Franziska, Tudoran, Ana Alina
Format: Journal Article
Language:English
Published: Elsevier Inc 01.02.2024
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ISSN:0148-2963, 1873-7978
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Abstract We propose a routine for combining partial least squares-structural equation modeling (PLS-SEM) with selected machine learning (ML) algorithms to exploit the two method’s causal-predictive and causal-exploratory capabilities. Triangulating these two methods can improve the predictive accuracy of research models, enhance the understanding of relationships, assist in identifying new relationships and therewith contribute to theorizing. We demonstrate the advantages and challenges of triangulating the two methods on an illustrative example along a four-step-routine: (1) Develop a PLS-SEM on a baseline conceptual model and use its standards to assess measurement model quality and generate latent variables scores. (2) Apply specific ML algorithms on the extracted data to validate relationships and identify new (linear) relationships that may go beyond the initial hypotheses; similarly, assess model advancements in the form of nonlinearities and interaction effects. (3) Evaluate the theoretical plausibility of alternative models. (4) Integrate alternative models in PLS-SEM and compare these with the baseline model using a recently proposed prediction-oriented test procedure in PLS-SEM.
AbstractList We propose a routine for combining partial least squares-structural equation modeling (PLS-SEM) with selected machine learning (ML) algorithms to exploit the two method’s causal-predictive and causal-exploratory capabilities. Triangulating these two methods can improve the predictive accuracy of research models, enhance the understanding of relationships, assist in identifying new relationships and therewith contribute to theorizing. We demonstrate the advantages and challenges of triangulating the two methods on an illustrative example along a four-step-routine: (1) Develop a PLS-SEM on a baseline conceptual model and use its standards to assess measurement model quality and generate latent variables scores. (2) Apply specific ML algorithms on the extracted data to validate relationships and identify new (linear) relationships that may go beyond the initial hypotheses; similarly, assess model advancements in the form of nonlinearities and interaction effects. (3) Evaluate the theoretical plausibility of alternative models. (4) Integrate alternative models in PLS-SEM and compare these with the baseline model using a recently proposed prediction-oriented test procedure in PLS-SEM.
ArticleNumber 114453
Author Richter, Nicole Franziska
Tudoran, Ana Alina
Author_xml – sequence: 1
  givenname: Nicole Franziska
  surname: Richter
  fullname: Richter, Nicole Franziska
  email: nicole@sam.sdu.dk
  organization: University of Southern Denmark, Denmark
– sequence: 2
  givenname: Ana Alina
  surname: Tudoran
  fullname: Tudoran, Ana Alina
  email: anat@econ.au.dk
  organization: Aarhus University, Denmark
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Keywords Machine learning (ML)
Partial least squares-structural equation modeling (PLS-SEM)
Method triangulation
Prediction
Unified theory of acceptance and use of technology (UTAUT)
Language English
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Snippet We propose a routine for combining partial least squares-structural equation modeling (PLS-SEM) with selected machine learning (ML) algorithms to exploit the...
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StartPage 114453
SubjectTerms Machine learning (ML)
Method triangulation
Partial least squares-structural equation modeling (PLS-SEM)
Prediction
Unified theory of acceptance and use of technology (UTAUT)
Title Elevating theoretical insight and predictive accuracy in business research: Combining PLS-SEM and selected machine learning algorithms
URI https://dx.doi.org/10.1016/j.jbusres.2023.114453
Volume 173
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